In Major Win For Beijing Panama Establishes Ties With China, Cuts Relations With Taiwan

Demonstrating China's creeping geopolitical dominance, on Monday night Panama’s President Juan Carlos Varela announced that Panama has established diplomatic ties with China while breaking relations with Taiwan in a major victory for Beijing, which continues to lure away the dwindling number of countries that have formal relations with the self-ruled island. President Varela said that the strategically important nation was upgrading its commercial ties with China and establishing full diplomatic with the country which is the second-biggest user of the Panama Canal and has played a key role in sectors from banking to telecommunications. Varela called Taiwan a great friend and said he hoped for a constructive reaction.

Panama's government said in a statement that it recognized there was only one China, with Taiwan belonging to the Asian giant, and that it was severing ties with Taipei. "The Panamanian government is today breaking its 'diplomatic ties' with Taiwan, and pledges to end all relations or official contact with Taiwan," the statement said.

“We have taken a historic step," Varela said. “Both countries opt for the connection of a world that is more and more integrated, which creates a new era of opportunities for a relationship that we are starting today."

"I'm convinced that this is the correct path for our country," Varela said.

In response, Taiwan's government said it was sorry and angry over Panama's decision, and said it would not compete with China in what it described as a "diplomatic money game".

"Our government expresses serious objections and strong condemnation in response to China enticing Panama to cut ties with us, confining our international space and offending the people of Taiwan," David Lee, Taiwan's minister of foreign affairs, told a briefing in Taipei quoted by Reuters.

Taiwan's President Tsai Ing-wen and Panama's Juan Carlos Varela during a welcome ceremony
before a meeting at the Presidential Palace in Panama City, Panama June 27, 2016.

As Bloomberg adds, the diplomatic U-turn reduces to 20 the number of nations that recognize the government in Taipei, rather than Beijing, as representing China. The Communist Party considers Taiwan a province and has criticized President Tsai Ing-wen’s refusal to accept that both sides belong to “One China,” its precondition for ties. Taiwan Presidential office spokesman Alex Huang said earlier that he couldn’t comment before any announcement by Panama.

In December, the West African island nation of Sao Tome and Principe cut diplomatic relations with Taiwan. Beijing formally reestablished relations with Gambia last March - another former Taiwanese partner in West Africa - and has stepped up communications with others, such as the Vatican.

The establishment of links with Panama is a coup for China, which has been showering largesse on countries throughout Central America in recent years in an attempt to get them to break ties with Taiwan. As recently as December, Panama's deputy foreign minister had said he did not expect any change in Panama's relations with Taiwan or China. Panama is one of Taiwan's oldest friends, but some diplomats in Beijing had speculated that the Central American country could become the next nation to break ties.

China is deeply suspicious of Taiwan President Tsai Ing-wen, who it thinks wants to push for the island's formal independence, although she says she wants to maintain peace with Beijing.


China and Taiwan have tried to poach each other's allies over the years, often dangling generous aid packages in front of developing nations, although Taipei struggles to compete with an increasingly powerful China.

Tsai visited Central American allies earlier this year but did not stop in Panama.

In Beijing, Panama's foreign minister de Saint Malo said President Varela had expressed 10 years ago his interest in establishing ties with China, and that she hoped the move would lead to trade, investment and tourism opportunities, especially for "exporting more goods from Panama to China".

Monday's diplomatic move could also raise questions about the future of a Chinese-backed project to build another Central American waterway to rival the Panama Canal in Nicaragua. Earmarked at a cost of $50 billion, the Nicaraguan scheme was met with widespread incredulity when it was announced in 2013, and critics have raised questions about its feasibility.

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In response to the announcement, Taiwan said it would immediately end cooperation with and assistance for Panama, and evacuate embassy and technical personnel "in order to safeguard our national sovereignty and dignity", Lee said.

Panama is the second country to switch its recognition to Beijing since Tsai took office last year, following a similar move by Sao Tome and Principe in December, trimming to 20 the number of countries that formally recognize Taiwan. Taiwan had as many as 30 diplomatic allies in the mid-1990s, and its remaining formal ties are with mostly smaller and poorer nations in Latin America and the Pacific.

China's Foreign Minister Wang Yi met his counterpart from Panama, Isabel de Saint Malo, in Beijing on Tuesday and signed a joint communiqué establishing ties.


MEFOBILLS A. Boaty Tue, 06/13/2017 - 10:02 Permalink

Yes, of course, the USSA has to own everything. Panama is U.S. offshore.  It is a banking center.  Corporations take their profits in Panama because it uses U.S Federal Reserve Notes.  In this way they can avoid income taxes, thus shifting the burden onto U.S. laboring middle class.Finance is criminogenic.  I'm going to keep reminding ZH readers that the money power has to be made lawful, or it is all over.  It is the one subject that matters the most, and influences everything.If I were advising China, it would be a Strategic Move to be in Panama and keep an eye on things, as it is a ground zero spot for Western Illuminist Banking Interests, not to mention movement of goods through the Canal.Panama is crucial to recycling petrodollars.  Saudi's recycle to Panama, buying TBills and storing them there... as evidenced by the amount of "invisible" flows revealed in Panama papers.(Another reminder, the 73 ((Kissinger))) Saudi Agreement is the framework for Petrodollar/ TBill Economy which runs the Western world.)"Congress is right behind this. In the 1960s it recognized that basically, criminals are the most liquid people in the world. They don’t want to tie down their money and property, because property can be seen, it’s visible. Finance in the balance of payments reports is called “Invisibles.” If you’re a criminal, you want to have your finance invisible in order to keep it safe. And the safest investment is U.S. Treasury bonds.So there was an argument in Congress in the 1960s: Do we want to have 15% tax withholding on the Treasury bonds, especially to foreigners? It was pointed out that most foreigners who hold Treasury bonds actually are criminals. So Congress said, we need criminal money. We are not going to withhold criminal taxes. We’re going to make crime tax-free. We’re going to tax American industry, we’re going to tax American labor, but not foreign criminals, because we need their money. "

In reply to by A. Boaty

swmnguy Pliskin Tue, 06/13/2017 - 09:54 Permalink

Well, he'd have to create that terrorist org first.  These things have to be done in a proper order, you know.  First recruit the worst people in a given society, based on the fracture lines already present.  Then get them the full collection of color-coordinated accessories.  Then have them provoke a crackdown.THEN arm them and turn them loose on the populace, provoking a yet-greater crackdown.Then you're cookin' with gas.

In reply to by Pliskin

medium giraffe Tue, 06/13/2017 - 06:33 Permalink… Imperialism is worried that China’s huge global infrastructure projects could challenge the U.S.-led world orderThe People’s Republic of China hosted a summit May 14 called the “One Belt, One Road” initiative, also known as the New Silk Road project. Twenty-nine heads of state and representatives of 130 countries attended from across Asia, Africa, Latin America and Europe. Seventy countries signed agreements with China to participate....The plan projects a network of trade routes with new rail lines, ports, highways, pipelines, telecommunications facilities and energy centers linking countries on four continents. It includes financing to promote urban planning, potable water, sanitation and food development. China is calling it the “plan of the century.”...Asian Infrastructure Investment Bank: Challenge to IMF and World Bank Past U.S. practices of seizing the assets of countries holding substantial funds in U.S. banks meant that the $1.26 trillion that China has held in U.S. Treasury notes was especially vulnerable. Until six months ago, China was the number one investor in U.S. Treasury notes. Now China is divesting....Despite strong U.S. efforts to discourage international participation in the OBOR infrastructure fund, Russia, Iran and Latin American countries promptly joined and contributed substantial capital. Breaking ranks, Germany and South Korea then became major shareholders, followed by Britain, France, Italy, Spain and Australia. The Philippines and even Saudi Arabia saw the advantages of participation. The AIIB, founded on June 29, 2015, began operations last year.----------------------------------------- We certainly live in interesting times.

Pure Evil medium giraffe Tue, 06/13/2017 - 09:07 Permalink

Looks like everyone is lining up for their chance at the Chinese trough.While Washington is mired in the swamp called the Middle East.We waste our blood and treasure ensuring global energy supplies.And, the Chinese suck the jobs and wealth out of the US and Europe and use it to take over the world through bribery.The Panamanians know that if the Chinese build a new canal through Nicaragua their little canal will become a museum piece.Something to be fondly remembered in travel films. Maybe they can recover from it by building water view estates along the canal to the retiring Yankees.

In reply to by medium giraffe

sinbad2 WTFUD Tue, 06/13/2017 - 18:26 Permalink

Not quite right.The US annexed part of Colombia, and called it Panama.So you can argue that because the US stole it, it isn't really Americas, but the US has fiercely maintained its ownership of Panama since it stole it in 1903.Nobody even considers the rights of the legal owner, Columbia.

In reply to by WTFUD

BritBob Tue, 06/13/2017 - 07:54 Permalink

 China is a member of the UN C24 Decolonization Committee and gives support to Argentina's mythical Malvinas claim. So much for the human and democratic rights of the Falkland Islanders and so much for that so-called sovereignty claim (Argentina has never legally owned the islands).Falklands: 1833 Usurpation & UN Resolutions: Meanwhile Taiwan supports the islanders right to self-determination.Who's right?  Guess...

Pacman7293 Tue, 06/13/2017 - 08:32 Permalink

USA should stop attempting to win the morally righteous competition. You get no points for being morally righteous. People will hate you NO MATTER WHAT YOU DO, because they WANT WHAT YOU HAVE. People around the world are not angry at USA because we are not morally righteous enough. They are angry because they are not on the winning team. Same goes to Feminism, Blacks, Mexicans, everyone it's just class envy wrapped up in a convoluted argument meant to bring down their enemy: White people. White people are actually the most competitive people on Earth because they want to not only win, but win when it's a "level playing field". They aren't satisfied winnin when an unlevel playing field. Even a level playing field isn't good enough. We demand special privledges for the folks we see as inferior so we can go on winning regardless. Other counteries don't do this crap. If you are Chinese you can be a citizen if you aren't there is nothing you can do to become a citizen. China is for Chinese people, racism is cool, and China does not care if you think they are morally inferior, they want to win. Same goes with every other country on Earth that is not inhabited by whites. We build the Panama Canal and we should have NEVER given it away. But again our morally righteous competitiveness got in the way so we screw ourselves. China would never do this. No other non-white country on Earth would do this. But the USA with it's moral righteousness competitivenss must do this so we fall for every cause of "social justice" and "Equality", meanwhile we've destroyed our entire society. We have no kids, we have no women, we have no culture, we have no media, we have no universities, we have no churches, we have no instituion of marriage, we are loosing our racial majority, and we can't even make a movie anymore without forigen intersts being fulfilled. All this crap for "equality" and the appeal to morality. Well the next guy in line doesn't give a fuck about your morality and sees your bitching as a reason to kill you for disturbing the social order. So good luck!

Ecclesia Militans Tue, 06/13/2017 - 10:22 Permalink

China is hilarious.  The Silk Road, the Panama Canal - how about they buy whatever's left of the Lighthouse at Alexandria and claim a foothold on the basis of Western knowledge and thought?  Meanwhile, as Beijing plans to pour useless scrip call Yuan into a manned moon mission, the US military is about to give Elon Musk all the business he can handle on his reusable orbital launch vehicles.  Maybe my Uncle Iggy can unload his low-mileage 1980 GM F-Body onto some exchange student from Schenzuan....

swmnguy Tue, 06/13/2017 - 10:48 Permalink

The current vacuum in Washington is leaving the rest of the world open for Beijing to roll up, leveraging their money to actually invest on the ground, rather than to merely speculate or throw around military power.America's problem is the whole Brzezinski doctrine.  When you've committed, all-in, on a strategy of global military dominance, you have to succeed 100% or fail utterly.  The Chinese have been at this Empire thing for 5000 years.  They've learned, the hard way and over millennia, that it's a lot better to use soft power as collateral to influence other nations to want to be on your side because they see their best advantage in that direction.  As opposed to hostage situations as the US military seems to prefer.The US could outdo the Chinese easily.  We've got a lot more money than they do, and a far more attractive set of amenities.  But we're stuck in our military hero-worship, so we won't.

swmnguy William Dorritt Tue, 06/13/2017 - 12:12 Permalink

But the Chinese don't operate that way.  They don't "move in."  They buy up locals to preside over the task, provide the money and expertise, and retain rights to use what they build and a market for the product.  They're very careful not to stir up the local power structure.That's the direct opposite of the US strategy.  The US atomizes the local civil society and pays the very worst elements of the society to make sure nobody else can get anything done.  China is in it to create alliances based around making money, and grows influence along the way by providing "stability."  The US looks to destabilize, so nobody can get anything done at all unless they can project military force anywhere at any time.

In reply to by William Dorritt

William Dorritt Tue, 06/13/2017 - 11:01 Permalink

The Leader of Panama probably left China withA new kidneyA suitcase or two full of Euros, Dollars and some KrugerrandsA week of wild sex with teen boys, girls, cadavers or anything else he could wish forStarring in a Chinese Kiddie Porn Video, probably not his first starring role on oneA spare HK passport in case things get hot along with an HK Condo etc.